Gateway Project may be stuck in traffic as Paso Robles sues a developer over fees due; a falling out may ensue

A large-scale project slated for the southwestern end of Paso Robles has hit a roadblock after a disagreement between the project’s developer and the city of Paso Robles prompted the city to terminate the application process.

The Gateway Project, planned for the northwest quadrant of the Highway 101 and Highway 46 West interchange, would be a major addition to the area also dubbed the Gateway to Paso Robles. Proposed by the realty branch of Moscow-based investment company Quorum Funds, the 270-acre project would include three resort hotels, a small retail commercial center, up to 35 single-family homes, vineyards, and open space. Because the site currently sits just outside of the city limits, the applicant has applied for the property to be annexed by the city. Other applications would change zoning, subdivide the property, and amend the General Plan.

The process hit a snag after a disagreement over who would pay for a costly realignment of Vine Street, the frontage road that extends south from Paso Robles along the project site to Highway 46 West, a troubled intersection plagued with dense multidirectional traffic that’s been many an engineer’s (and motorist’s) nightmare.

As per an agreement between the applicant and the city, the applicant was to provide all application fees up front, which was moving along until Quorum Funds took issue with the traffic aspect of the project’s administrative Environmental Impact Report (EIR). A slight falling out ensued, prompting the city to terminate the application process and to sue Quorum Funds for an outstanding $110,045 plus attorney fees. Quorum sued the city over approval of another hotel project in the area, the Residence Inn by Marriott, which would have a much smaller footprint. That project, said Quorum’s Cambria-based attorney Greg Sanders, was approved by the city with minimal responsibility for Vine Street’s redirection. The Gateway Project, on the other hand, would be responsible for significant costs and property use in order for Vine Street to be redirected and linked to Theatre Drive at Highway 46 West. Sanders said the city’s recommendation is at odds with Caltrans’ recommendation, and that the EIR didn’t fully consider two alternatives.

“The city is putting the entire burden on my client,” Sanders said. “That’s not fair, and that’s not legal.”

While the disagreement may stem from the EIR and seep into the California Environmental Quality Act process, Paso Robles City Attorney Iris Yang said that’s another issue and would have to be part of separate legal negotiations.

“We do have a fundamental disagreement over how the agreement for the advance of funds is worded,” Yang said at the July 1 City Council meeting. At hand, said city officials, was the fact that Quorum still owes Paso a chunk of change for services rendered. How the disagreement will affect the project’s future is yet to be told.

“Clearly the city always wants to prepare what is an environmentally sufficient document,” Yang said. “But it’s not a judgment that is for the applicant to make.”